· Allows countries to specialize in the production of those products they are best suited to producing
· Specialization promotes greater efficiency and productivity (contributes to economic growth)
· Consumers have access to have wider range of product
· Source of tax revenue for governments
Exports: good manufactured in home country and sold in foreign country
Imports: produced in foreign country bought by home country
Mercantilism
· Economic was viewed as a zero sum game
· Stimulate exports and curtail imports in order to produce a positive balance of trade
· Subsidized exports, high tariff imports
· Labour was most significant factor, low labour costs translated into increased competitiveness in export markers
